The Groupon Gamble

You see them all over the place today, deals that you can’t refuse.  I have the Deal of the Day in my local newspaper that allows me to get “something” for 50% off, usually a restaurant or lift tickets at Woodbury Ski and Racket.  The most popular deal maker today has to be a company called Groupon.  They offer deep discounts at local establishments.  You pay for the discounted item or service upfront and as long as 20 people or more sign up for the deal, you get the discount.  Sounds good?  It is good, for you.  The person offering the deal could end up losing big time if there is no cap on the deal.  I read a couple horror stories in the last year about small businesses losing big time because of way too many people accepting the deal.   

There was this company that sold gourmet muffins and she had so many people sign up for the 50% off deal that she almost went bankrupt.  There is also a story about a woman who runs a small café in Portland that was offering $13.00 worth of food for $6.00. (Boris)  Well, she had a constant stream of people coming to her place who never returned.  She said it was the biggest business mistake that she ever made. 

The idea of Groupon is great but the cut that they take off the top is what makes it very scary.  For deals under $10.00 they take 100% of the profits, ouch!  I guess they think the advertising you get out of the deal makes it worth the cost.  Maybe for a well established business but the small business owner should think twice before they set up something like this.

Online advertising could reach more potential customers than ever before.  It could cost you next to nothing if you do it right and your business could grow overnight.  Should you use a service like Groupon?  Well, they say they put caps on deals and you are sent a load of literature about the risks and benefits before and commitment is made but then why are there all these horror stories?  My opinion, Groupon could be good for you.  Don’t do it unless you are fully prepared to follow through with the maximum allowed deals.  Remember, a bad customer experience gets spread around much more than a good one.  If you are an agent trying to build an advertising campaign for a client, make sure you steer them in the right direction.  They trust your judgement, don’t suggest a Groupon deal unless you know their entire financial situation. 

Everybody wants to save money where they can these days.  I would try other ways of getting people into your store or on your website before going for a service like this.  It could be a big gamble but it could also have a big payoff.  If you are a business owner then you are used to taking chances.  Think before you sign anything, the choice is up to you, choose wisely.

 Boris, Cynthia. "Groupon Gone Wrong: One Customer’s Sad Tale." marketing pilgrim.com. N.p., 

      20/09/2010. Web. 24 Feb 2012. <http://www.marketingpilgrim.com/2010/09/groupon-gone-wrong-

      one-customers-sad-tale.html>.       

The Definition of Advertising

Being a consumer in the 21^st century is very exciting.  Our world is full of futuristic technology that seems to be improving every day.  It is to the point that you never know when to buy something because there are always rumors of the next model being produced within a few months.  But seriously, you would never buy anything if you waited for the “best” version to come out.

I got a great deal on a 51in Philips HDTV back in 2007 that I had to take advantage of.  It was shipped to my house without a shipping charge or tax.  The only hesitation I felt was the fact that it was a “rear projection” technology that was quickly losing popularity to the current LCD and plasma sets selling for over $1,000.  I took the chance and was pleasantly surprised with the picture quality.  I was very lucky to get such a big set for the amount of money I spent.  The picture was clear and the built in speakers were pretty decent as well.

I started to enjoy all of the benefits of being able to see a show that was broadcast in HD on a set that was made to display it.  Great news, but we have become spoiled in our viewing expectations.  I find it difficult watching old programs that I used to watch years ago.  Not only because they have phones that are attached to cords or old computer systems that show monitors that are three feet thick but the picture quality makes us wonder how we were ever able to stand watching it in the first place.  I even get that old feeling with some of the commercials that are being made today. 

I was reading a news story called “Falling on Def Ears: Marketers Slow to Embrace HD Ads” and it inspired me to share my view on the subject.  It is funny how fast we change and become spoiled by technology these days.  Could you imagine not being able to check your email whenever you feel the need on your Smartphone?  I have only had a Smartphone for about a year and a half but I would never go without one again.  I find it funny when I’m watching a baseball game or football game in full HD quality and suddenly an ad starts to play that is not in HD.  I feel offended!  My eyes!!! Those insulting black bars that seem to be censoring something from both sided of my screen and the less than adequate picture quality.  Actually, I don’t notice the change in quality that much, it’s more of a black bar issue I have than the quality issue.

 

So why are advertisers slow to follow?  Studies have shown that viewers are more likely to watch a spot in HD than standard def.   This is leading to lost dollars for a lot of companies since only 16% of commercial spots are shot in HD.  There is real data these days that show the difference in customer response to the quality of the commercials being shown.  I think it all has to do with the cost of equipment to produce the commercials.  It seems to be the only variable that would change. 

It would be interesting to see if these same companies that are advertising on TV in standard def have any online ads playing somewhere in HD.  If I were in charge of making decisions, aside from wondering if I really need to iron my pants or if they are “good enough” for work that day, I would be investing heavily in Internet viewing over regular cable viewing because cable is going down for the count anyway.  Watching streaming media on your phone, tablet, set top box is where the money needs to go.  Until everyone is on board and there is some sort of industry standard, I will just have to deal with being visually assaulted every time those dreaded black bars appear.  What do you think is lurking behind those bars anyway?  The world may never know.

   


      Crupi, Anthony. "Falling on Def Ears: Marketers Slow to Embrace HD Ads Luddites could miss out on as much as $8.2 billion per year." http://www.adweek.com. N.p., 09/02/2012. Web. 18 Feb 2012. <http://www.adweek.com/news/advertising-branding/falling-def-ears-marketers-slow-embrace-hd-ads-138149>. 

I See Great Things In Your Future

Can we predict the future?  Can YOU predict the future?  I think all we could do is guess, kind of like weathermen do.  There are a lot of people that try to tell what is going to happen in the upcoming year, which way trends will go, but the truth of the matter is, we can only guess.  We can make educated guesses and sound like we know what we are talking about.  We could look at what has happened in the last few months and form an opinion but there are no experts.  Some people talk a good talk but experts they are not.

I have a lot of respect for people that use the terminology “likely to expect” in their futuristic outlook of advertising.  I came across a write up that looked at seven “trends” to look for in 2012. Seven Trends In Advertising for 2012  It was well written and I wanted to share some of the highlights from the article.  I saw the words “likely to expect” and I was hooked so I kept reading.

This blogger didn’t share his (her) name, at least I could not find it but the website is called Small Business Advertising Strategies.  They mentioned how small companies will expand the use of automated marketing, “a mainstream solution for connecting their marketing operations from the top, through to online search engines and finally down to the sales and customer service level.”

Small businesses will need to be quick about how their service or product is perceived because of the lightning fast results that social networking has had on spreading news, good or bad.  Not only are companies listening to what their customers are saying but they are changing their products because of this feedback.  

Doesn’t it seem like as we get more technologically advanced; we seem to take a thousand steps back.  What I mean is, way, way back in time politicians listened to the people they served, companies went door to door selling their products and everything was more personal and smaller, not huge and full of corporate greed.  With the emergence of social media it seems to have put the power back into the hands of the consumers.  We now have the power to make or break a company because of our connected reach.

The article talked about the importance of the “like” buttons and how many Smartphone users we see shopping with their handheld devices.  We will see services like Groupon increase and using social sites for advertising.

 

I am ready to tackle this brave new world; I read everything I could get my hands on and hope that I could make a difference, somehow.  I wouldn’t invest too much time trying to predict what the next big thing is, I would step back and take it all in.  If you focus on one trend too heavily you may find yourself stuck with a room full of VCR’s and no one to buy them.  Keep your ears and eyes open and please, do me a big favor…let me know what you hear. 



  "Advertising Trends - 7 Trends In Advertisin for 2012." Small Business Adveretising Stratagies. N.p., n.d. Web. 10 Feb 2012. <www.smallbusinessadvertisingstratagies.com>.

Overnight Sensation

If you are a small business owner you know how expensive it could be to advertise your product or services using conventional methods.  Although these outlets are successful (newspapers, radio, tv, magazines, etc.) there are ways to promote your business today that has the potential to make you a huge success, an international success. 

Completing transactions on the Internet is becoming a very popular way for people to make purchases.  Amazon, the world’s largest online retailer, saw a 41% increase in sales during fiscal 2011. (Brohan)  I think it makes sense to agree that these numbers are going to increase as the younger generation gains more purchasing power.  These children were born into a connected world and it is only natural for them to act in this manner. 

It will be very interesting to see the statistics in twenty years.  That may sound like a long time but I chose that number for a reason.  In twenty years the children that are now only 5 years old will be college graduates.  The statistics for online purchase at that point will stop changing.  It will not be comparing online to conventional purchases because it will be fully integrated into society as something that is the norm.  I bet you the number of households with televisions grew at tremendous rates in the beginning too but now those numbers have leveled off and you see little change between the “have” and the “have nots”, I predict the same path for online purchasing.

Websites act as virtual storefronts, allowing businesses to stay open 24/7.(Lendor)  You could keep track of your web visitors, what pages they spend the most time on, or the least.  Your content will stay up to date and relevant all the time, unlike a printed ad which is out of sight the next time a new issue comes out. 

If you are not advertising your business online yet, don’t be afraid.  Research how to do it the most effectively for your situation.  Hopefully, you will end up in a whole new tax bracket and you might even have people around the world talking about you.  YOU could be an Overnight Sensation!

Sources:

 Brohan, Mark. "http://www.internetretailer.com/2012/01/31/amazon-sales-soar-profits-plunge." http://www.internetretailer.com. Internet Retailer, 31/01/2012. Web. 4 Feb 2012. <http://www.internetretailer.com/2012/01/31/amazon-sales-soar-profits-plunge>.

Lendor, Carla. "Internet Promotion - Advantages and Disadvantages." ezinearticles.com. ezinearticles.com, 23/07/2005. Web. 4 Feb 2012. <http://ezinearticles.com/?Internet-Promotion---Advantages-and-Disadvantages&id=53561>.